December 15, 2006

A Chicago-Milwaukee Region?

Could cities located near one another, Milwaukee and Chicago for example, enhance their respective growth and development through closer linkages? Why might a greater Chicago–Milwaukee metropolitan area want stronger ties, and what policies, if any, might be considered to bring about such a union?

There are several reasons why larger metropolitan areas are generally leading U.S. economic growth. In recent decades, larger metropolitan areas have typically become more specialized in managerial and technical occupations, while smaller metropolitan economies have become more specialized in production activities. For example, one recent article found that those U.S. metropolitan areas having a population above 5 million had increased their concentration of management to production workers to 39 percent by 1990 from 10 percent in 1950. In part, this increasing concentration in larger cities is due to advances in communication and transportation that have allowed companies and organizations to administer and manage from a central location or to travel easily to multiple production locations.

In this light, it is understandable, then, that larger cities have also tended to grow more rapidly in terms of income and/or population. That is because specialized professional and managerial occupations tend to pay more than production. Moreover, since at least the late 1970s in the U.S., economic returns to labor, including wages and salaries, have generally been growing faster for managerial, technical, and other occupations attendant to higher educational attainment.

A second reason for such shifting specialization and growth owes much to the growth in work force participation of women. In the U.S., the labor force participation of working age women rose from 37.7 in 1960 to almost 59.6 percent today. Moreover, the educational attainment of women has also been rising such that it now exceeds men among the younger age cohorts. Since young singles tend to marry someone with similar education, this has given rise to growing numbers of “power couples” who often must find not one, but two, specialized jobs in the same labor market. Because large metropolitan areas have both deep labor markets and more specialized occupational opportunities, these places have become magnets for such “power couples.” In turn, firms respond to the greater labor supply of professionals by siting their establishments in larger metropolitan areas, and thereby transform local economies.

There are several reasons to keep an eye on the greater Chicago and Milwaukee areas to examine the prospects that they will someday become a single labor market and benefit from the attendant economies of larger scale and scope of such a merger. The Chicago and Milwaukee areas are only 86 miles apart, as measured from city center to city center. The Chicago metro area is more populous at 9.4 million as compared to 1.5 million in Milwaukee, but together they yield a population of 11.0 million.

Historically, Chicago–Milwaukee work force linkages have been limited. Only 13,000 Milwaukee residents commute to Chicago, daily, as of year 2000, up from 1,600 in year 1990. The reverse commute is even smaller. However, commuting in both directions is growing rapidly.

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Still, a closer look at some important subsectors of professional industry workers is suggestive of the greater work force that may soon arise from combination. The chart below combines industry employment for Chicago and Milwaukee metro areas across several professional, management and business service sectors. As combined, for example, employment in the Chicago–Milwaukee “computer systems design” sector would rank second to New York, allowing Chicago to bypass both the San Francisco and the Los Angeles metro areas. Other sectors of mutual benefit in Chicago and Milwaukee can be seen at the Midwest Economy website.

Click to enlarge.

Click to enlarge.

While such stronger within-industry labor markets might be advantageous, the additional attraction across multiple sectors may be greater still. For households with members having differing but specialized occupations, the possibilities for a multiple match of people with jobs in a combined Chicago–Milwaukee metro area labor pool could be great. This would enhance companies’ ability to attract and retain skilled labor in both regions.

So too, not all jobs within the professional and business services sectors require the very highest educational attainment. For example, according to recent estimates of the U.S. Bureau of Labor Statistics, office and administrative support jobs comprise one-third of all employment in the combined professional services, finance, and management of companies when measured in industry sectors. So too, spin-off employment would also generate a wide range of local employment as the spending of added service professionals ripples through the local economy. This feature is especially important since job needs are great for lesser-skilled labor in both markets.

How might Chicago and Milwaukee push along their destiny as a combined metropolitan area? One low-cost way is to publicize their mutual proximity in marketing each region to prospective employers and to job recruits. Both Chicago and Milwaukee are highly active in economic development marketing. Of course, private sector employers and employment intermediaries may also be effective in spreading such information about the greater breadth of employment opportunities.

Another policy avenue may be greater investment in transportation between the metro areas that would facilitate commuting flows. Both interstate highways and train transportation are now in service. The possible labor market advantages of easier and more dependable auto and passenger train travel might weigh significantly in the consideration of any future roadway/rail expansion and maintenance decisions. Combined efforts in applying for federal transportation grant monies to serve a large and more closely-integrated Chicago–Milwaukee market might also be effective—for both personal travel and for freight transportation including railroad.

Milwaukee’s major airport is also located between downtown Milwaukee and downtown Chicago. At a time when the Chicago area’s air travel capacity is strained, better access to Milwaukee’s Mitchell field could be advantageous.

Other cooperative ventures and ideas have yet to be identified. The absence of organized efforts to do so is a bit puzzling in the Chicago–Milwaukee corridor. In contrast, the advent of the trade agreements between Canada and the U.S. has sparked any number of private and private-public associations to promote natural trade flows across the border within local corridors. As the chart below shows, the progress of employment growth has not been especially robust in either metropolitan area over the past 15 years. Perhaps a little détente along the Illinois-Wisconsin border might be advantageous to all.

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Posted by Testa at December 15, 2006 9:02 AM

Comments

The Road to Heaven is paved with Good Intentions, unfortunately, so is the Road to Hell.

We can link up Milwaukee and Chicago all we want, but there remains the nagging issue of geography and weather. I drove from Milwaukee to Chicago in the last good snowstorm we had (2005). There was not a single snowplow on the road for the entire 90 miles. WGN was chiming away with weather warnings and thank-yous to the noble State Highway crews out plowing, yet I went for over 2 hours without seeing a truck (nor a State Police car), though I did see plenty of civillian cars pulled over due to the weather.

Both our States have capitulated any responsibility to safe roads and transportation support some time ago. The number of State Police on the Chicago Interstate system is around 1/10 of the number assigned to personal detail for Gov Blagoevich.

How can we link two great Midwest Cities when both of our State are out to lunch?

A recent newspaper article appearing in the Milwaukee Journal Sentinel airs out more ideas on the benefits of connecting Milwaukee and Chicago. It also mentions infrastructure improvements that would ease the commute and expand on Chicago's status as a transportation hub adding a third airport (Mitchell International) to its ranks.

Posted by: Bill Testa at January 10, 2007 4:45 PM

The posting on Chicago and Milwaukee strikes me as applying to other midwest communities and their relation to Chicago, such as South Bend, Indiana. South Bend, with its strong colleges and universities, would seem to a smaller version of Milwaukee, that is a community which would attract professional couples where one member might work in Chicago and the other in the smaller community. South Bend, like Milwaukee thus would both gain from and contribute to a growing Lower Lake Michigan metropolitan area. And South Bend has the benefit of a existing commuter rail connection (the 'South Shore') that is relatively immune to weather and which could be expanded. One wonders how much the existence of the Central/Eastern time line boundary between the Chicago and South Bend inhibits establishing stronger ties. The presence of a time line adjacent a major metropolitan area seems an almost unique event vis-a-vis Chicago and nearby parts of Indiana. Any thoughts?

Posted by: Paul at February 15, 2007 4:30 PM

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